A Goshen, Ind.-based bus maker is suing its former insurance carrier in an effort to recoup at least $5 million it paid out in a lawsuit alleging its buses were defective.

The Elkhart Truth reported that in 2012 King County, Wash., sued the Star Trans Bus Division of Supreme Corp., alleging 35 buses the company supplied its Seattle area transit system were poorly designed and manufactured, and had numerous defects that didn’t conform to contract specifications, making the buses unsafe for drivers and passengers. Because of the alleged defects, the buses were out of service for about 70% of the 20 months the transit system tried to use them, the county argued in court documents. The county claimed damages of nearly $10.6 million.

In June 2013, the company and county reached an out-of-court settlement in which Supreme agreed to take back the buses and pay the county about $4.7 million, about $500,000 of which it recovered from subcontractors.

The Goshen, Ind., City Council took the first step this week toward approving a tax abatement request for Supreme Corp. that will set the stage for expansion and possibly 350 new jobs in the next two years.

According to a report in the Goshen News, the council voted 7-0 to establish an economic redevelopment area, and appears poised to cast a final approval next month for tax abatement.

Supreme’s expansion plan involves the consolidation of corporate technical facilities and improvements to its manufacturing area. Those improvements involve $4.6 million in real property and $2.7 million in machinery and equipment, according to a report released by staff with Goshen’s Department of Community Development.

Supreme Corp., first established in 1974, manufactures various types of truck bodies for several industries and has other facilities in California, Texas, Pennsylvania and Georgia.

The Goshen News reported that the move by Supreme Corp., a division of Supreme Industries Inc., is the latest in a series of business expansion plans announced in the past six months that were coupled with tax abatement through the Goshen City Council. It’s also more welcome news for a local economy that garnered national attention as one of the hardest-hit areas in the country.

“Our core manufacturing base is alive and well in Elkhart County,” said Dave Ogle, director of business retention and expansion for the Economic Development Corporation of Elkhart County.

“This is a great opportunity for us,” Ogle said.

Supreme is seeking a seven-year tax phase-in that could result in the company saving $688,000 over the entire span. Despite the savings, the company points out that it will still pay an estimated $500,000 in additional property taxes during that time period.

Representatives of Supreme told council members the company is in the midst of planning to renovate and refurbish many of the company’s 13 buildings on its corporate campus along Kercher Road.

“We’re in need of expansion and we see the market is taking a good turn, so we hope to open up some capacity, improve the process and take on some more business,” said Michael Oium, vice president of operations for Supreme.

Some of the new jobs are expected to include technical and engineering positions. Additional hirings are expected to take place through 2014 and the company says the average wage of the new employees will be $35,622.

Goshen, Ind.-based Supreme Corp.’s expansion plans in the next three years could result in up to 350 new jobs.

The Goshen News reported that company officials declined comment Friday (March 2), but are expected to attend Tuesday’s Goshen City Council meeting and seek a tax abatement extending over seven years. Supreme, first established in 1974, manufactures various types of truck bodies for several industries and has other facilities in California, Texas, Pennsylvania and Georgia.

The expansion involves the consolidation of corporate technical facilities and improvements to its manufacturing area. Those improvements involve $4.6 million in real property and $2.7 million in machinery and equipment, according to a report released by the city’s department of community development.

Additional hirings are expected to take place through 2014 and the company says the average wage of the new employees will be $35,622, the report said.

The bigger work force could bring the company’s total employment to 980, which would make Supreme the fifth largest employer in Elkhart County.

According to the city report, the company will ask for a seven-year tax phase-in that could result in the company saving $688,000 over the entire span. Despite the savings, the company points out that it will still pay an estimated $500,000 in additional property taxes during that time period.

Requested action by the council involves two separate moves. First, council members would vote to establish an economic revitalization area and then vote on the tax abatement request. Those votes often happen in separate meetings. Following Tuesday’s meeting, the council’s next meeting is two weeks later on March 20.

According to its website, the company posted revenues of $301 million in 2011.

Chapman began his business career at Star Tank and Boat Co., which was founded by his grandfather, Arthur Schrock. The firm later became Starcraft Inc., now a division of Jayco Inc. He was then involved in starting several companies, including Supreme Corp., Rockwood, Advantage Van and Master Fab.

Rockwood started out in the early 1970s as a maker of mini motorhomes and later added travel trailers and folding camping trailers. He later sold the company to Bangor Punta Corp. It went through a series of owners before being purchased by Forest River Inc. around 1996.

He established the Maple City Industrial Park in Goshen, current site of the Keystone RV Co. complex on the south side of Goshen.

“His biggest legacy to the industry was he always kept a high focus on quality and integrity,” Don Gunden, Rockwood division general manager, told RVBUSINESS.com. “He was always honest, always believed you needed to deliver the best product you could.”

Chapman was born June 1, 1929, in Goshen and was a lifelong Goshen resident.

Surviving are his wife, the former Joyce Fanning, whom he married Aug. 20, 1950; two daughters, Linda Wargon and Kelly (Tim) Weadick; two grandsons, Michael and Marshall Weadick; and one sister, Anna (Gene) Duffin, all of Goshen.

He was a graduate of Goshen High School, where he was an outstanding three-sport athlete. He graduated from Indiana University’s School of Business, served in the United States Marine Corps and was an avid golfer.

Respecting his wishes, there will be no visitation. The family will have a private graveside service at Violett Cemetery. Memorials may be given to the Boys and Girls Club of Middlebury or the Humane Society of Elkhart County. Rieth-Rohrer-Ehret Funeral Home, Goshen, is handling the arrangements.